DSM Reports Strong Q4, Boosted by Martek

Overall sales rose by 1% to €2.23 billion ($3 billion), full-year net profit rose 61 percent to €814 million ($1.1 billion). However, the company also registered a 43 percent drop in fourth-quarter net profit from the previous year. Q4 profit for 2011 was €85 million ($114.4 million) down from €149 million a year earlier.

Feb 29 2012 --- Royal DSM NV has announced a full-year net profit rise to €814 million ($1.1 billion), up 61 percent from the previous year.

However, the company also registered a 43 percent drop in fourth-quarter net profit from the previous year. Q4 profit for 2011 was €85 million ($114.4 million) down from €149 million a year earlier. Despite this conspicuous drop in the final quarter, the company has expressed cautious optimism for the year ahead despite difficulties in the European economy.

Overall sales rose by 1% to €2.23 billion ($3 billion), full-year net profit rose 61 percent to €814 million ($1.1 billion).

CEO Feike Sijbesma says that despite the economic crisis in Europe, the company is "well placed to achieve our ambitious 2013 targets."

Commenting on the results, Feike Sijbesma, CEO/Chairman of the DSM Managing Board, said: “2011 was another strong year for DSM despite the challenges of the global economy, adverse currency movements and high raw material costs.

“As a consequence we propose to increase our dividend for the second consecutive year. In Nutrition we made good progress once again and Polymer Intermediates delivered its highest profitability in history.

Innovation sales - measured as sales from innovative products and applications introduced in the last five years - reached 18% of total net sales in 2011, close to the company’s 2015 target of approximately 20%.

FoodIngredientsFirst spoke to DSM Managing Board Member Stephan Tanda about the results and what they mean for their Nutritional sector: “Our growth target is to grow at GDP plus 2%, so we are pleased with the rate the business is growing. The acquisition of Martek added 8% to growth, but underlying organic growth is at 5%. That is driven by the growth drivers that are well known: demographics, rising population, increased standard of living, increased consumption of meat, milk and eggs all these factors are driving our animal nutrition business. People are making better nutrition choices around the world.

“We have seen both sides of our business grow, both animal and human nutrition. It’s a key focus for us and we always aim to make traditional acquisitions.”

On the one year anniversary of the company’s acquisition of Martek, Tanda spoke about how the company had integrated into DSM’s portfolio: “Our market position with Martek is working out extremely well, the company fits like hand in glove with DSM. We have been able to execute all the synergies we were planning on, we are taking the market for their products global, we are focusing on infant nutrition. In further work on the dietary supplements base, the overall acquisition has worked very well. Our Omega-3 products especially have strong potential; the Martek portfolio’s revenue is growing at double digit rates.”

Full year Nutrition sales increased by 12% with organic sales growth of 4% due to higher volumes across all businesses and stable pricing. Martek (contributing since the end of February 2011) delivered an excellent performance with sales reaching €284 million and EBITDA of €88 million.

The Pharma result (€36 million) was lower, but stabilizing. As a result of the formation of the joint venture with Sinochem in anti-infectives, DSM Sinochem Pharmaceuticals was consolidated at 50% in the last 4 months of the year.

By Michael Holt